Chapter 1 - What Are Shares? Flashcards
What is the difference between stocks and shares?
Shares are the term used in the UK while stocks is a term used in the US.
What is an ordinary share?
It is when someone is a shareholder and owns a part of a business. They usually have voting rights depending on the number of shares they own.
What is an A and B share?
A and B shares are when companies sell shares of different voting standards. For example, a “A” share could have 1 voting right whilst a “B” share could have 10.
What is a preference share?
A preference share is when a a person invests in a company and will receive a fixed interest from that share. It is preference because they will receive money first after creditors if the company goes bust.
What is issues share capital?
Issues shared capital is the money raised from selling shares to run the business.
